Dipartimento di Scienze Economiche
Università degli Studi di Firenze
Working Paper Series
The Polytheistic Condition:
Incomparable Assets and Special Currency
M. Aria and N. Bellanca
Working Paper N. 20/2012
Ottobre 2012
Dipartimento di Scienze Economiche, Università degli Studi di Firenze
Via delle Pandette 9, 50127 Firenze, Italia
www.dse.unifi.it
The findings, interpretations, and conclusions expressed in the working paper series are those
of the authors alone. They do not represent the view of Dipartimento di Scienze Economiche,
Università degli Studi di Firenze
Stampato in proprio in Firenze dal Dipartimento Scienze Economiche
(Via delle Pandette 9, 50127 Firenze) nel mese di Ottobre 2012,
Esemplare Fuori Commercio Per il Deposito Legale
agli effetti della Legge 15 Aprile 2004, N.106
The Polytheistic Condition:
Incomparable Assets and Special Currency♦
Matteo Aria,
Department of Storia Culture Religioni, La Sapienza - Rome University; Department of Economics, Florence University,
email: [email protected]
Nicolò Bellanca,
Department of Economics, Florence University, via delle Pandette 9, 50127 Firenze, email:[email protected]
[email protected]
Abstract
In this paper we intend to rethink and to reinforce the arguments of the authors who critique
the mainstream economic theories and the rational choice theory. We start asserting that a
fundamental anthropological condition of the choice is the incomparability of many alternatives
and that in this situations the subject chooses without being able to give any adequate
comparison judgments. Then we show that these choices, even if not deriving from any
rational processes,
reasons”.
and not being measurable in terms of utility, can be made for “good
Such incomparability roots in the polytheistic condition of the subject, in which
numerous action criteria coexist conflicting with each other. We also elaborate a conceptual
framework investigate the cases in which more institutional logics are combined, as well as
the cases in which such logics mingle with each other. In the last part of the paper, rethinking
the theories of Richard Thaler and Viviana Zelizer, we try to propose an explanation of the
presence and diffusion of “special currencies” in economic life circuits.
♦
We would like to thank Vittorio Emanuele Ferrante for the numerous stimulating discussions and for his important
support in the preparation and writing of the third and fourth chapters. In addition, we would like to thank Fabio Dei,
Angelo Antoci, Simone Bertoli, Ian Carter and Luigino Bruni for their comments and suggestions. Finally, Antonio
Gay’ s precious work inspired most of the topics within this paper. Any imperfection is ours.
1. Incomparable Assets and Special Currency
A classical subject of Social Sciences focuses on the capitalism propensity
to commodify and monetize any area of human activity. Authors putting
forward their arguments against the universal establishment of this tendency
usually invoke the heterogeneity of individuals and groups, the variety of
cultures and the penetration of economic activities into social relationship
networks. In our paper we intend to reinforce those arguments through an
analysis coming from the heart of Economics, that is, from the rational choice
theory. In p.2 we will show that a fundamental anthropological condition of the
choice is the incomparability of many alternatives; that this causes the
rejection of the hypothesis of completeness of the preferential relation, giving
place to frequent and considerable situations in which the subject chooses
without being able to give any adequate comparison judgments.
In p.3 we will show that these choices, even if not deriving from any rational
processes,
and not being measurable in terms of utility, can be made for
“good reasons”. In p.4 we will widen the topic, asserting that such
incomparability roots in the polytheistic condition of the subject, in which
numerous action criteria coexist conflicting with each other. We will also
elaborate a conceptual framework that will let us investigate the cases in which
more institutional logics are combined, as well as the cases in which such
logics mingle with each other. Finally, in p.5 we will explain some points of
difference between our approach and the one recently supported by heterodox
economists as Richard Thaler and by economic sociologists as Viviana Zelizer.
This comparison will let us propose our explanation of the presence and
diffusion of “special currencies” in economic life circuits, both currently and in
the past.
2. Economics and the incomparability of alternatives
The idea of various branches of Economics being unified by the resolution
of all problems related to the maximum (or minimum) constrain for an
objective function has been enstablished since the classical work of Paul
Samuelson (1947). This idea was developed along the path initiated especially
by Gary Becker (1973, 1993), up to the analysis of numerous human
phenomena, not just those belonging to the sphere of markets and production
activities. Today, according to the typical comprehensive model appearing in
major economic analysis journals, the homo oeconomicus pursues both
material richness originated in the markets and moral, non-monetary costs and
benefits (see Levitt and List, 2007). The objective function of the rational
agent includes variables such as fairness and altruism, the sense of identity
and social status etc., adding from case to case what is required to show that
every choice maximizes its utility within the established limits. As it has often
been observed, we are witnessing a tautological approach (see Hirschman,
1986).
As Economics study rational activity, considered as located in the optimal
point of the relation tying it to its objective, then it is true by definition that the
subject interprets in the best way the relation between the means and the
purpose: if, considering a borderline example, he was a masochist, by seeking
pain he would always and anyway be choosing the strategy which better
identifies of all the available alternatives; and this would be true even if he
went so far as to cause himself permanent damage or death.
In our opinion, another critic can be added to the accusation of
tautology, and it is not less radical. The economic science conceives the
subject as a decision-maker characterized by its capacity to order all the
alternatives he takes into consideration according to a consistent and complete
judgment . According to Sugden (2004, p.1017), «It is folk saying in the
discipline that, as far as theory is concerned, an individual is a preference
ordering: everything the theorist needs to know about a person is contained in
that person’s preferences. Viewed in this perspective, a person who lacks a
coherent set of preferences appears as lacking an integrated sense of his own
self». This concept does not depend on a utilitarian philosophy. In fact, the
subject does not have to maximize utility; it is enough for him to obtain the
best result out of some alternatives. In its turn, the subject evaluates a result
as “the best” according to any judgment criterion able to direct its choices,
ordering the alternatives. Therefore, the utility
judgment criterion, which
historically has been often identified with the economic science, can be
replaced with a criterion of ethical, aesthetical, political or other judgment,
without any changes in the object and analysis methodology. The subject,
considered as the carrier of preferences, judges Alternative y as more useful,
more convenient, more beautiful, more virtuous, more fair, warmer or more
intelligent etc. in comparison with Alternative x; so he prefers y to x.
Preferences are no more than a set of comparison judgments based on a
certain criterion. The theoretical limit of this concept emerges when we
recognize that, in the decision-maker’s opinion, quite many social alternatives
are incomparable to each other. If this is true, the subject cannot be identified
with the preference judgment system and the basics of the economic science
are put at stake. Let us focus on this point which is decisive for the formulation
of our paper.
In the mainstream economic science, the subject is put before couples of
alternatives: the collection of his comparative judgments on the pairs
constitutes his relation of preference (see Kreps, 1988; Gay, 1992). If the
subject considers State x better than State y, the first one is strictly preferred
to the second one. If he prefers x to y, then for any other State z the results is
that either x is preferred to z or z is preferred to y, or both judgments are true.
Due to this hypothesis of completeness of the relation of preference, the agent
is able to judge any alternative included into the set of X choice subjects, once
the other two x alternatives have been evaluated: it is worse than the best
one, or better than the worst one, or both.
Therefore, the relation of order creates a consistent and complete
succession in which we are able to compare two of any X elements establishing
which one comes “first” and which one “second”. However, numerous social
processes are initiated by alternatives that are incomparable to each other,
thus avoiding the trichotomy of one being preferred to the other, or vice versa,
or the two being indifferent among eachother1. What prevails in these
processes is the incompleteness of the relation of order as, while we are under
the condition of ordering a pair of quite similar alternatives, we can hesitate
(suspend our judgment) in front of a third alternative that is “too distant” or
“too similar” in terms of quality. Let us start from excessive dissimilarity. An
example: imagine that there’s no preference for us in what to buy: Apartment
x in New York or Apartment y in Boston. If Boston Apartment z is proposed to
us, x and z continue to be the same (non-different) for us. For the transitivity
of the non-difference relation, it must also be that we are indifferent to y and
z. But this may also not happen: a Boston apartment can be preferred to the
other one. Let us analyze the case of excessive similarity. If I touch Cookers 1,
2 and3 in a certain sequence, I feel that all of them are cold. But if I touch
Cooker 1 and then 3 in a sequence, I notice the difference: Cooker 3 is
warmer. It means that Cooker 2 is not-comparable to the others. In fact, if the
relation was complete, considering that 1 precedes 3, then either 1 would have
to precede 2 or 2 would have to precede 1, or both; but in fact this does not
happen. The above-described “good sense” cases mean that the possibility to
order all the alternatives remains in place until we believe that we notice
adequate similarities between them. Thus, if Set X is our universe of social
processes, we compare its elements x, y and z only if they seem to us either
not too dissimilar or not too similar to each other.
A
decisive
aspect
for
our
argument
consists
in
the
fact
that
incompleteness does not derive from “failures of rationality” that can be
remedied for: it is not caused by lack of information on the alternatives, nor by
the limited ability of the subject to process such information. It emerges rather
when the subject makes evaluations on the basis of different and contrasting
opinions that are more difficult to unify in a consistent judgment when the
number of alternatives are for him, as we have seen, too similar or too
1
We distinguish between “comparability” (or “congruence”) and “commensurability”. While the second one requires a
value unit scale to cardinally measure the differences between the alternatives, an ordinalistic ranking is enough for the
first.
dissimilar. This is a general characteristic of qualitative judgments that cannot
always be converted into quantitative comparisons: this is a fundamental
anthropological condition of choice that can be met in any human society. But
this is not all. There is at least one more reason making the incompleteness
inevitable: «usually preferences on options are induced by preferences on
results. I prefer an option because I prefer the result to which it leads, that is,
its expected utility compared to the result of other options. However, if my
situation is that of uncertainty or ignorance and not of risk, It is likely that I’m
not be able to compare the results” (Elster, 2007, p.267).
In the event of uncertainty, «certain decisions that our individual is
asked to make might involve highly hypothetical situations, which he will never
face in real life; he might feel that he cannot reach an “honest” decision in
such cases» (Aumann, 1962, p.446). In the event of ignorance, for instance
when we choose among several food menus, we usually consider several
attributes: taste, authenticity, calories etc. Such a circumstance may generate
incomparability in the terms discussed above.
To avoid it, let us imagine
artificially
the
that
the
subject
considers
just
“taste”
criterion.
The
incomparability emerges anyway: in fact, «to be able to make a choice, the
agent must order the whole set of alternatives on the basis of his preferences.
But to be able to express a preference or indifference on the basis of the
“taste” he should have already “tasted” all the different alternatives», that is,
he should have come out of the ignorance which is inherent to the major part
of new human experiences (Laise, 1998, p.43). Therefore, also this second
reason, evoking uncertainty and ignorance, indicates that incompleteness
originates from the anthropological condition of choice and not from any formal
characteristic that could be removed or introduced to favour the analytical
tractability of the economic model (for experimental tests of this thesis please
see Danan and Ziegelmeyer, 2004; Eliaz and Ok, 2006).
The subject’s difficulties to put alternatives in order according to a
finalized and consistent judgment criterion become, if possible, even heavier
when social interactions are considered. We propose three key examples. Let
us imagine that we classify an organization of society with three numbers (a,
b, c), where a is the degree of economic welfare; b of political influence; c of
the social status. (However it is enough to consider the order of the three
judgments: no reference to numbers is required). Which is the order of
preference of the possible combinations? Is an organization producing levels
(2, 1, 3) better than the one producing (1, 2, 3)? There is no definite answer
as it is not possible to univocally calculate the compensations between one
dimension and the other ones (see Fleurbaey, 2009). Let us imagine once
again – as a second example – that Anna and Bruno have different rates of
transformation of resources into utility. A government wanting to distribute
equally their opportunities may equalize their share of resources, thus creating
a difference in their levels of utility (both total and marginal). Alternatively, it
could even their utility levels thus creating a difference in their resources. But
will not be able to even both their levels of utility and their shares of resources.
It will necessarily have to equal one thing together with the inequality of the
other one (Carter, 2001, p.15).
Finally, «let’s consider the case of an individual seeking to improve his
social position given a certain dominating scale of values in a society. He will
have the three alternatives: either to act individually (more work, more
initiative on the market etc.); or to develop a political activity with others who
share his objectives, seeking to obtain some government measures that would
improve his position and the one of his category; or to act so as to modify the
scale of values determining his social position in relation to others (e.g. modify
the evaluation of manual labor, modify ethnic prejudice etc.). To choose he will
have to be able to compare the costs he will bear in the three cases. What
should he do if he does not have a common value criterion for the three action
types?» (Pizzorno 1993, p. 164).
Taking into account the individual and intersubject reasons referred to
above, it appears relevant to assume that in many circumstances the
alternatives
are
incomparable.
This
implies
that
it
is
impossible
to
simultaneously maximize the numerous dimensions of the phenomenon under
examination and that the very basics of the economic science should be
reconsidered. First of all, the incomparability changes the nature of the
economic choice. As long as the preferences are complete, a problem of
(constrained) optimization consists of some decision variables (we should
determine their optimal value), an objective function (indicating the functional
relation between the decision variables and some variables having a value that
should be maximized or minimized) and an acceptable set (which is the set of
the available alternatives for the decision-maker). The homo oeconomicus
maximizes (profit, satisfaction levels deriving from consumption, social
welfare) or minimizes (the costs required to produce a certain amount of
output) his objective function given some constraints; for him a relative
maximum is also an absolute maximum if the objective function is almost
concave and the acceptable set is convex. His behaviour is predictable: given
the preferences, given the nature of constraints and assuming the appropriate
formal restrictions, his choice is unique.
However, this deterministic conception fails in the presence of the
incomparability. As the subject chooses in a voluntary manner, he avoids any
worsening, that is, avoids those alternatives that, in his own opinion, are
dominated by other alternatives. However, while in the event of the
comparability the non-dominated alternatives coincided with the dominant
ones and the latter selected the best one among themselves (the maximum
state), now the subject seeks just to enter the set of maximal alternatives
dominating all the others without any domination among themselves. In other
words, while for maximization purposes the subject adopted the rule of rising
as high as possible in the order, in the search of the maxima his rule is to rise
when it is possible: thus his choices depend both on the initial state and on the
process followed to take those choices. But this is not enough. The set of the
incomparable maxima has a paradoxical nature: this is a set
of choices in
which judgments focused on the best or on the equivalent are suspended. In
fact, it misses both the preference judgments (otherwise they would not be
maxima!) and the indifference ones (as “I think this one and that one are just
the same” supposes a utilitarian judgments which is instead absent, according
to the hypothesis). So the paradox consists in the circumstance that, when
comparability fails, the subject has to choose between alternatives he cannot
order, that is, without having any criterion to do it!
How is such choice void of any judgment made? When the alternatives
appear incomparable to the subject, he may adopted four basic strategies. The
first one consists in trying to introduce the comparability. This may be
performed by turning to arbitrary expedients consisting in criteria deriving
from a case, a caprice or a habit. According to John Maynard Keynes (1973,
p.294), «generally speaking, when we make a decision we have to choose
from a great number of alternatives, and none of them can be proved to be
more “rational” than the others, which means that one is in condition to order
the aggregate amount of the benefits obtainable from the set of the
consequences of each of them according to the merit. To avoid falling between
two stools we must consider other kind of reasons that are not “rational”,
meaning related to the evaluation of consequences, but are determined by
habit, instinct, preference, desire, will etc.". This is a theoretically weak answer
as the invoked motives, even being quite relevant, are not susceptible to
specific rigorous analysis: in fact, case, caprice or habit appear to be external
factors justifying an action without explaining it. Otherwise, and this is the
second strategy, comparability can be re-established by means of an objective
logic
of the structure. E.g. Marx «had warned that the transformational
powers of money subverted reality, “confounding and compounding ... all
natural and human qualities ... [money] serves to exchange every property for
every other, even contradictory, property and object: it is the fraternization of
impossibilities”. As the ultimate objectifier – a “god among commodities” –
money not only obliterated all subjective connections between objects and
individuals, but also reduced personal relations to the “cash nexus” [...] As
pure exchange value, money necessarily assumed an “unmeaning” form, which
in turn neutralized all possible qualitative distinctions between commodities.
[...] For Marx, money was thus an irresistible and “radical leveler”, invading all
areas of social life» (Zelizer, 1994, pp.7-8). in this passage it’s not the subject
anymore who wishes that dissimilar alternatives can be evaluated in monetary
terms; the incomparability of the choices is actually reduced by means of a
coercive institutional device introduced by the capitalist currency. Another
good example regards the elementary relationships that, according to LéviStrauss (1949), have an invariant structure under which the various particularconcrete relationship systems are just “transformations”, in the algebraic
meaning. The reason for organizing this structure does not transcend only the
individual conscience and existence, but also society and history, referring to
some kind of collective subconscious (or esprit). Such positions as those of
Marx and Lévi-Strauss do not face the problem of the subjective answers to
the incomparability of the social alternatives but dissolve it invoking a more
profound homogeneous reality. The third strategy aimed at restoring the
comparability consists in showing that the power relations are the ones to
establish a standard for all alternatives leveling. A paradigmatic case is the
“governamentality” theory of Michel Foucault (2005). This neologism resulting
from the crasis between the “government” and “rationality” terms denotes the
diffusion of appropriate domination strategies and logics among all the
population. Foucault and the scholars inspired by him, such as Espeland and
Stevens (2007) and Fourcade (2011), examine the practices used by
politicians, ideologists, technicians, lawyers, professional economists et similia
to actively try to find an effective way of commensurating and evaluating social
assets. Their approach has the benefit of expressing a power conception that is
not just punitive, coercive and violent, but able to put subjectivity under
control. However, they reject the idea (the one we are insisting on here) that
quite many relevant social processes can treat the incomparability of the social
assets without dissolving or eliminating it, through the voluntary and conscious
choices of individuals. And this is the fourth strategy: the one that received
little focus in the literature but that appears of extreme relevance to us.
3. The choice in front of the incomparability
To show in the simplest terms how a subject can choose according to
reasons in the absence of judgments, that is, when his alternatives are
incomparable
maximal
elements,
two
fundamental
cases
must
be
distinguished: the one in which the incomparability of the maximal elements is
total and the one in which it is partial. Let us start examining the first case.
The access to a maximum is not a state of peace: the end of any stimulus
towards a change, the block of any further choice. In fact, a maximal element
z, according to the relation of preference
P , can stay on a path of
improvements, which includes a x that is non-different from z, for which some
better values than x but not than z exist. As shown in Figure 1, Element x acts
as a “bridge” between a maximal element according to P and any subsequent
improvements. The P relation of preference and its inverse value (of dispreference), taken together, create the G relation of judgment. The G residual
value indicates Set N composed of the alternatives that cannot be judged..
Being outside G, we cannot define in N an equivalence (or non-difference)
relation in terms of pairs of alternatives judged by the subject as having equal
utility. Instead, it is possible to establish the non-difference through a third
alternative that can be accessed simultaneously from the first two: therefore,
in a space N void of any judgments, the non-difference requisite does not
mean equal wellness or utility any more but having the same relation with
other alternatives. On Figure 1, x and z have the same relation with Alternative
w, or with Alternative k, and are thus non-different. Being incomparable, x and
z cannot replace each other (according to a judgment); however, they can be
replaced as elements of the same class of non-difference. Therefore, the
subject may wish to replace Maximal z with Maximal x because x allows the
shift in y, that is, because a change is made from x (the utility of such a
change is ignored). Here are the choices expressing the fourth strategy: the
incomparability of the alternatives cannot be eliminated, it causes the
“suspension of judgment” and there is no choice criterion deriving from a
rational calculation of utility. However, the circumstance in which the subject
does not know how to improve (o remain non-different) and doesn’t even know
how to define the improvement (or non-difference) does not imply that he
would not like to change: in fact, a change is a improvement in itself due to
the possibility of experimentation and knowledge that it opens, regardless of
the fact that it increases the direct and immediate welfare of the subject
(Hayek, 1960). The transfer from z to y through x is the elementary
mechanism of the fulfillment of this strategy.
FIGURE 1
Let us pass to the most rigorous explanation that can be skipped by
readers who are not quite interested. If X
is a set of choice objects, the
decision regarding them, made by a single subject able to give judgments of
value, is traditionally based on a binary relation between the elements of X
named as relation of preference and that we can denote with P . Given P ⊂ X2
is the binary relation of “tight” asymmetric preference (thus unreflecting) and
transitive of the subject interpreted in the traditional manner: (y, x) ∈ P, when
the subject prefers y to x. Given P−1 = {(x, y) | (y, x) ∈ P} is its inverted
value. Given G = P ∪ P−1 is the binary relation of judgment, also unreflecting
and transitive but symmetrical: (y, x) ∈ G when the subject is able to express
a judgment of “tight” preference between the two states. If x ∈ X, we define
the set of values that are better than x according to P as P (x) = {y | (y, x) ∈
P} and the set of values worse than x as P−1 (x) = {y | (y, x) ∈ P−1}. We then
define G (x) = {y | (y, x) ∈ G} as the set of states that can be judged,
according to the subject’s tight preference, in relation to x. N = X2/G is the
residual value of the judgment; obviously, (y, x) ∈ N, when the subject does
not judge the two states according to his preference. N is reflecting and
symmetrical but not necessarily transitive. If it happens that N is transitive, it
is an equivalence relation dividing X in classes named as equivalence classes,
not empty and separated, put in the linear order set by P on representative
elements of the classes: so P is named as regular. Therefore, in terms of
finiteness P can be represented numerically by a real function U : X → R, which
is traditionally named as utility function. Due to such possibility to be
represented, , if (y, x) ∈ N, then u (y) = u (x), and such equality is
interpreted as “equal evaluation of welfare” of the states by the subject who
judges them as non-different.
If P is not regular, it is always possible to impose some transitivity
constraint on the N elements in order to define its restriction being an
equivalence relation, interpretable as non-difference. Also in the absence of
any numeric representation it will, in fact, be reasonable to l imagine that the
subject, even with irregular preferences, is able, under certain circumstances,
to elaborate a judgment of non-difference between pairs of states and that this
non-difference judgment based on an equal evaluation logic meets the
transitivity requisite. An example of a case in which it seems reasonable to
keep a non-difference judgment is the comparison of each state with itself:
here the non-difference judgment naturally derives from the relation of
identity. In general, we say that when a set of pairs in Residual Value N meets
the transitivity requisite, it characterizes them as non-different. Various
restriction criteria sufficient to guarantee the transitivity can be considered. We
will recall use the equilocation criterion: two states, x and y, are called
equilocated only if P (x) = P (y) e P−1 (x) = P−1 (y). In this case (y, x) ∈ N
necessarily, as otherwise, e.g., (y, x) ∈ P, so y ∈ P (x), when y /∈ P (y)
obviously. If x and y are equilocated, as well as y and z, then x and z also
result equilocated. Therefore, (x, y) ∈ N and (y, z) ∈ N imply that (x, z) ∈ N:
so equilocation implies transitivity. What is particularly important is superior
equilocation, i.e. equality between the best values that can be defined as EU =
{(y, x) ∈ N | P (x) = P (y)}.
If Y ⊆ X, and P(x) ∩ Y = ∅, we will say that x is a maximal element
(according to P) in Y, i.e. tout court maximal when Y = X. The existence of
maximal element is guaranteed by the finiteness of X. M is the whole set of
maximal elements for the subject. If for each x ∈ M, y ∈ q (x) is a maximal
element, we will say that Q is equimaximal and will name q (x) as maximum
equivalence class. If Q is equimaximal, then it parcels M out: in fact, it cannot
happen that each element of the Q partition can contain both maximal and
non-maximal elements. In the event of regular preferences we will have the
only maximum equivalence class and, in general, if two states are not in the
same non-difference class, they are sorted by tight preference and at least one
of the two is not maximal. If the preferences are not regular, they may be not
unsorted and both of them may have maximal elements. It is shown that
Superior
Equilocation
EU
is
the
maximum
equimaximum
equivalence
guaranteeing that the maximal elements are in one and only equivalence class.
Let us summarize. The loss of transitivity of the residual value makes it
impossible to represent the preferences numerically. It causes the important
consequence of the impossibility to put forward an intrinsic welfare concept
related to each alternative state by means of the utility function, even if this is
possible in spite of the numerous numerical representations, i.e. in the event
of states with equal “utility”. In fact, when two states are non-different, they
give the same welfare regardless of the kind of numerical representation.
Rather, when we reconstruct a non-difference relation as transitive restriction
on the residual value, we cannot say any more that two equal states give the
same welfare because they give the same “utility” as we do not have any
numerical representation. In the event of irregular preferences, when we have
run out of the state improvements with strict preference and we have reached
a maximum, the incomparability with other states does not allow any further
transfers. Here a definition of non-difference can be fit, and its interpretation is
no more the traditional “equal welfare” but that of “equal relation” with other
states. E.g. x ∈ q ∈ E and y ∈ q ∈ E, i.e. x and y belong to the same
equivalence class, so they are non-different not because they ensure the same
welfare, but just because both of them have access to the same best values
and are, say, the result of the same improvements. Or x ∈ q ∈ EL and y ∈ q
∈ EL, x and y are non-different just because they result from the same
improvements, even if they do not have access to the same best values. If
now we stipulate the possibility to switch some elements of the same nondifference class (even if we continue not to allow the possibility to switch
incomparable elements) that is, if we build the relation of non-difference using
criteria which are consonant with the hypotheses of replaceability we would
like to adopt; if, for example, this construction makes us consider a relation as
highly equilocated, we can replace a maximum (according to P) with its nondifferent non-maximum value and take advantage of improvements that would
be otherwise precluded.
Let us now consider the second fundamental case, the one in which it is
possible to compare a maximum with some other maximal elements, but not
with all of them, namely a case where the incomparability is partial.
Within the theoretic approach we are supporting, the subject acts voluntarily
and the incomparability is unavoidable. Therefore, partial comparisons neither
are made because someone imposes them, nor they restore the completeness
of the relation of preference. Nevertheless, they allow to act reasonably,
through an economic protocol which defines the cost of leaving one
incomparable alternative for another, and which therefore sets the reasons for
making (or not making) a choice. This protocol can be illustrated in the
following way. Let us consider some sets which include comparable elements,
but which are incomparable among them: one includes alternatives 1 and 2; a
second 2 and 3; a third 3 and 4; and a final fourth 4 and 5. As figure 2 shows,
alternative 1 is comparable with 2, but it is incomparable with 3, 4 and 5. in
turn, 2 is comparable with 3, which is comparable with 4, which is comparable
with 5. Thus, between alternative 1 and 5 there is a qualitative distance of four
steps, namely if 1 the subject moves to 2,3 and 4, it can reach 5. That is, the
subject can make 1 and 5 closer, not because he makes them comparable, but
because he explores a way to get them closer. The four steps are a qualitative
measure of the cost the subject undertakes to reach 5 starting from 1; they
are a measure of the of the shift from goods available in 1 to goods available
in 5
FIGURE 2
Three different examples help to clarify this protocol. Let us suppose the
first set is composed by two sculptures the subject can compare. Alternative 1
is a female Fidia statue, whereas 2 is the Discobolus of Myron. Within the
second set, alternative 3 is a Rodin statue representing an athlete. Whereas
Fidia 1 and Rodin 3 are incomparable to each other, the subject sets a criterion
of comparison between Myron 2 and Rodin 3, since both the sculptures
represent athletes. Alternative 4 is a Picasso painting representing a juggler.
Whereas for the subject Myron 2 and Picasso 4 are incomparable to each
other, he identifies comparability between Rodin and Picasso 4, since they are
works of art of the same period, made in the same country, and dedicated to
male characters doing physical exercises. Finally, alternative 5 is a Rembrandt
picture portraying a merchant. Between Rodin 3 and Rembrandt 5 there is not
comparability, but there is some between Picasso 4 and Rembrandt 5, since
both are paintings, they are tempera works, with a particular attention to
bright colours and roughly of the same dimensions.
The second example is considered by Ludwig Wittgenstein (1967).
Among board games and card games, ball games and sports competitions,
building block games and games of chances, sleight of hand and game
requiring patience, there are not requisites common to all of them, and certain
are incomparable to each other. Nevertheless the subject conceives a cognitive
map in which each game is included using the protocol described above: 1 is
associated to 2, which in turn is associated to 3 and so on. «These phenomena
have no one thing in common in virtue of which we use the same word for all –
but there are many different kinds of affinity between them. […] We see a
complicated network of similarities overlapping and crossing each other»
(Wittgenstein, 1967, pp-XCIII- XCIV). The subject establishing connections
does not know/want/have to and cannot remove the heterogeneity of games
which he examines; instead he practices a protocol of “conversion” among
alternative places in one set (institutional context) and another.
The third and last example considers, at the extremes 1 e 5, a common
material good and a noble immaterial good. Let’s say Alternative 1 is a laundry
detergent, while 2 is a delicate hand-washing solution for coloured clothes.
Let’s say Alternative 3 is a hand-made ashtray. 1 and 2 are comparable
between them because they are variants of the same good, whereas 1 is
incomparable with 3. Instead, for the subject, 2 and 3 can be comparable,
because in his cognitive map both are related to handmade activities.
say
Let’s
Alternative 4 is a handicraft statuette representing a deity. If 2 and 4
seam incomparable to the subject, 3 and 4 can be comparable, since both are
related to handicraft. Finally, Let’s say 5 is a unit of prayer to one’s deity. In
this case, if 3 and 4 are incomparable, 4 and 5 can be comparable, since both
refer to religious activities.
Whether they are highly different works of art, very diverse games,
material or immaterial goods, and so on, the protocol format is universal, but
its contents are peculiar to each case. Everyone tries, according to subjective
criteria, to move from some alternatives to others. (It is therefore unavoidable
that every reader, according to his own criteria, will find some of our examples
more convincing than others). But the theoretical point does not concern single
criteria, nor cultural influence and inter-subjectivity they obviously reflect;
rather, it concerns the universality of the protocol. Among alternatives, this
measures the cost of leaving one good for one other through the qualitative
distance between two alternatives, namely through the needed steps to go
from one to another. But this «cost is subjective, it exists in the mind of the
decision maker and nowhere else. […] The cost cannot be measured by anyone
except the decision maker, because there’s no way the subjective experience
can be directly observed » (Buchanan, 1969, p.96). Add to this the fact that
the nature of the protocol is not deductive, because the subject does not find
out ex ante what “aligns” all the alternatives, to consider them one by one
later on. On the contrary, the subject explores in itinere what (for him)
associates one single alternative to another, and what in turn associates that
one to another different one, until he can give shape to a setting where to act.
The minimum number of steps between an alternative and another, to which it
is incomparable, represents the subjective measure of the cost from the Fidia
statue to Rembrant’s merchant, from the chess game to the tennis match, or
from the laundry detergent to the prayer. We all act like that, and we couldn’t
do otherwise.
Until now we have discussed how a single subject, in presence of an
incomparability (total or partial) of the alternatives, can make choices
according to reasons, even without a coherent judgment. Let us investigate
now how reasonable choices can be made in an inter-subjective field, laying no
claims to include comparability. Let us consider for instance a crucial
phenomenon characterizing the market: the formation of a uniform rate of
profit. According to mainstream economists, it is a case peculiar to the
institutional sphere of economy. As rather Becattini (1983, pp-46 and 55)
outlines: «It is evident – and only a “scientist doping” can make it unclear –
that every human subject, both worker or capitalistic entrepreneur, shifts his
resources from an activity to another according to the representation that he
subjectively figures out concerning: a) his own resources; b) their returns,
somehow defined, in all different possible uses; c) their actual possible uses. If
it is like that, it becomes necessary to understand how the subject represents
resources, how he evaluates their returns, how he distributes them. Real
capitalistic systems go through phases in which “straining“ of cultural process
is stronger and phases in which this “straining” is weaker. When it is less
marked, meaning when those values and meanings that the profits’ subsystem produces move “quasi-naturally” with those ones resulting from a
“cultural evolution”, the socio-economic growth process develops regularly: all
of the subjects read and evaluate reality more or less in the same way;
consistent and self-justifying configurations of expectations develop, the
economic process produces fulfilment of needs and profits, simultaneously and
jointly».
Thus, the investments return
rate evens out, not because of the lack of an
impersonal and automatic mechanism which excludes an extra-profit by making
capitals migrating from a business to another; rather, because entrepreneurs
represent to themselves the business activities included in the institutional sphere of
economy, within the institutional cultural sphere. and they do that in rather stable and
mutual ways, bringing them to the perception that, for each of them, the final
investment is convenient, considering the investments made by the other members of
the community. What happens is the establishment of an self-enforcing expectations
system. Let us think of a group of investors. The n.1 divides reality in 10 sections:
section I (“metallurgic”)boundary goes from 0 to 3 (of a hypothetical line), II
(“information”)from 4 to 8, III (“building”) from 9 to 15 and so on. Also n.2 divides
reality in 10 sections, but sector I boundary goes from 0 to 4, II from 7 to 13 (since
the entrepreneur does not see options 5 and 6, or they are not accessible to him, or
he refuses them), III goes from 14 to 19, and so on. N.3 divides reality in 12 sections,
since two of them are separated in independent sub-sections, and so on. What is
crucial? That n.1 expectations can be confirmed, given n.2 ones; at the same time it is
crucial that n.2 expectations can be confirmed, given n.1 ones. It does not matter that
sections (or industries) really exist out there, and that each entrepreneur calculates
suitability of moving his capital to one or another sector, until balancing marginal
returns.
In a few words, considering the incomparability of alternatives, it is possible to
obtain social consent on the “unit of measurement” of judgments and actions,
instead of trying to establish a form of comparability. This “consent” is a set of
shared individual expectations A referring to a collective self-enforcing
behaviour Q in a social setting X. it does not demand univocal judgment
criteria, therefore it does not demand comparability of alternatives. I can
ignore how to measure (one to each other, or using the same “currency”)
detergents, prayers units and flight tickets; actually, It is possible that I am
not able to set them in order sensibly on the same scale. Nonetheless I can
recognize that during the social encounters among me holding detergent
packs, you who have units of prayer, and him holding flight tickets, there is a
concurrence towards reciprocally confirming expectations. We often make this
cognitive action in situations in which alternatives are incomparable, and it is
well described by the famous comment of the philosopher Jacques Maritain:
«do you want to know if I and my colleagues agree on subjective rights? Sure,
but don’t ask us what they are!».
A powerful instrument formulated by the recent neo-institutionalist economic
analysis enables to understand how this consent is built: it is the “institutional
complementarity” (Aoki, 2001). Two variables (in consumption, production and
organization, among institutions) are complementary if, when subject A
enhances one variable, , incremental benefits deriving by enhancing the other
variable for subject B. Let us suppose that x’ and x’’ are two alternative
institutions (equilibrium outcomes) in domain X, whereas z and z’ are two
alternative institutions in domain Z. Let’s suppose that payoffs difference
U(x’)-U(x’’) grows for each player of domain X (it does not need that all of
them have the same function of payoff), when z’ or z’’ prevails in domain Z. At
the same time, let us suppose that playoff difference V(z’)-V(z’’) grows for
every players within domain Z (they can be partially or totally overlapping
players of domain X), when x’ or x’’ prevails in X. Then games in X and Z are
called
super-modular,
and
x’
and
z’
(alternatively
x’’
and
z’’)
are
complementary to each other.
If the condition of super-modularity holds, a combination of balance, and
especially an institutional viable equilibrium, can be either (x ', z') or (x ", z").
Furthermore, even if one of them is less efficient in terms of Pareto-ranking, it
may nevertheless establish itself as a balance, once it is obtained. The
institutional
complementarity
is
thus
defined
by
the
following
two
circumstances: (1) the additional benefit of having the institution x' instead of
the institution x'' in some domain X, is greater when the institution z' (instead
of the institution z '') is chosen in the domain Z. (2) The additional benefit of
having the institution z'' instead of the institution z' in some domain Z is
greater when the institution x'' (instead of the institution x') is chosen in the
domain X. There are therefore two Nash equilibria for the system which
includes X and Z: (x ', z') and (x ", z"). In the case of (x ', z'), the choice of x’
in X is optimal, given the choice of Z, and the choice of z' in Z is optimal, given
the choice of X; there is thus a pair of expectations on the choice of each
player such that, should even be known the choice of the other, nobody would
wants to change his choice.
4. A conceptual framework of the polytheistic condition
We already argued that the non-comparability of alternatives modifies both,
the single subject’s and the intersubjective voluntary choices. Let’s now
discuss the implications of the non-comparability in the analysis of the
institutions of a society. The topic can be effectively introduced by referring –in
a transdisciplinary perspective- to the indications of an economist, a
sociologist, and an anthropologist. Maffeo Pantaleoni, whose writings date back
to the end of the XIX century and the beginning of the XX, is one of the few
economists
who
recognizes
the
centrality
of
the
non-comparability
of
alternatives in social life. He upholds the idea that each individual is rooted into
many different institutions and that his preferences for one or the other are
heterogeneous (Pantaleoni 1917a, p.175; 1925, p.178).
According to
Pantaleoni, we can make a distinction between the ideological/cultural sphere,
the political sphere and the economic/material one. Therefore, «there are at
least three kind of relationships between human beings, two of which aren’t
ruled by economic laws. Such kinds of relationships are so different one from
another that I wouldn’t know which kind of bridge I could build to connect
them. It’s necessary to jump, because there is a hiatus. You enter in a new
world by moving from one to the other» (Pantaleoni 1925, p.186). Given that
the subject elaborates different selection criteria according to the institutional
sphere, within each area the subject tends to apply a sole selection criterion:
thus, in the market economy he acts in a univocal and coherent way, in the
family he acts in a different but equally precise way and in the political area in
another peculiar way. According to Pantaleoni, if the society had well defined
boundaries
between
institutional
spheres,
we’d
have
many
positive
implications. «Let’s suppose, for example, that seats in a theatre or on a train
are distributed not only to those who are willing to pay more for the tickets,
compared to those unwilling to do so, and that have therefore voluntarily
excluded themselves. Which other method could be applied? Do we want to
give the tickets at a set price, to those who arrive first? Who will win, strong
shoulders and fists or those who will pay such strong shoulders and fists? Do
we want to draw lots? This way, those who don’t want to pay for the tickets
will receive them and will sell them, and also those who are willing to pay will
receive them, on condition that they could set a good price to sell them back.
Will tickets be given as ‘favors’? Bribery will arise among the dispensers of
favors, and will play a role in obtaining the role of favor dispensers»
(Pantaleoni 1925, p.275). However, Pantaleoni ascertains, usually this doesn’t
happen, because each sphere’s social assets can cross boundaries and can be
used to get benefits in a different one. Indeed, in the absence of «a criterion to
decide which of these different hedonic structures is the strongest and which is
the weakest» (Pantaleoni 1925, p.352), each one struggles with «the game
rules […] extremely various in the different games called life» (Pantaleoni
1917b, p.15), and «the requirements to win change constantly » (Pantaleoni
1925, p.357).
The subject doesn’t limit himself solely to calculate how to optimize within a
given sphere, but starts a dynamic process of inter-institutional optimization:
one can obtain a payment by giving affection, or sell his vote in return for
‘favors’, or avoid to pay a service physically threatening the tax collector. Often
it is strategically more convenient to use the assets of the X area in the Z one,
instead of the X sphere, because the assets’ transfer from one institutional
area to the other contributes to overcome constrains and to take opportunities.
Pantaleoni’s position, above mentioned, is heterodox among economists.
For sociologists, Max Weber constitutes an essential classic. He elaborates, in
the same years, a similar consideration, analyzing the human condition in
terms of polytheism of values. Polytheism in fact, indicates the coexistence of
numerous gods, having each one of them separate functions and specific
fields: there can be gods linked to a place (Athens or Sparta), to an activity
(fishing, hunting, love, war), to a profession, to the protection from diseases or
dangers. In
polytheism the values can’t be scaled; «what is given to
understand is just the acknowledgment of the divine in one or the other case,
or rather in one system or the other» (Weber 1948, p.32). Whereas in the past
times’ polytheism, the spheres of influence of each god were kept separated; it
is during modernity, according to Weber, that «impersonal forces have taken
over personal divinities; antagonism has taken over polytheistic –as well as
monotheistic- hierarchies of values, an irreconcilable “endless fight” over
different values. Human beings are compelled to face not only depersonalized
needs but also pretentiously universalizing, and for this reason conflicting,
needs. This is, according to Weber ‘the destiny of our epoch, a destiny which
cannot be mitigated neither by any theology, nor by any science» (Schluchter
1979, p.44). Thus, Weber’s thesis notices the irreducible opposition among the
final reasons of social actors. As many interpreters have underlined, his
position is strategic: a human being «has to choose which gods he wants to
believe in and he has to serve at times one or another» (Weber 1970, p.124).
Among the gods «it is impossible to relativize or find a compromise. Of course,
it is impossible according to their sense. Since […]in almost all peculiar
definition of stance by real human beings, , the spheres of values intersect and
intertwine» (Weber 1974, p.332, added cursive).
This last quotation, as well as Pantaleoni’s similar intuition, sets the theoretical
topic faced by the anthropologist Paul Bohannan in late Fifties: how can
incomparable and often antagonistic values be contaminated? How can the
alternatives within one institutional area be used in another one?
Bohannan, through the study of the Tiv population of Nigeria, replies that,
according to his interpretation, such population shapes «a multi-centric
economy [...] in which a society’s exchangeable goods fall into two or more
mutually exclusive spheres, each marked by different institutionalization and
different moral values. In some multi-centric economies these spheres remain
distinct, though in most there are more or less instituzionalized means of
converting wealth from one into wealth in another» (Bohannan, 1959, p.492).
For goods, or more generically alternatives, of an institutional sphere to be
transacted with those of another one, it is necessary that the subject
controlling them is able to estimate the quid pro quo, meaning the cost of their
conversion. The term “conversion”, suggested by Bohannan,
appropriately
reminds us that not all the quid pro quo are commercial trades because not
each quid pro quo requires the goods’ comparability. While the trade on a
market takes place thanks to a universal currency used to buy goods, the
conversion of a good belonging to a certain sphere into a good of another
sphere is a completely different operation, and it needs the protocols
mentioned in §3 that will be discussed again in §5.
Furthermore, as Pantaleoni noted, the conversion makes «the ultimate type of
maximization» possible (Bohannan, 1959, p.497). In general, until it operates
in a mono-centric economy, the subject improves his condition cleverly using
the given rules of that sphere. When instead, he participates to a multi-centric
economy, he can use the rules of a sphere to take advantage within another
sphere: he can take advantage of the status’ goods to obtain more food than
he could actually purchase, or take advantage of the power assets to change
the rules of the sphere in which women circulate, and so on. In spite of the
fact that in the following years «Melanesianists and Africanists provide
important correctives to Bohannan’s model» (Maurer, 2006, p.21), the notion
of “conversion” is still a precious contribution.
Now that Pantaleoni, Weber and Bohannan’s important ideas on the polytheism
of the human condition have been discussed, we suggest a simple framework
to represent them. When we talk about a conceptual framework, we think of a
methodological path similar to the one that inspired, for example, Douglas
North’s remarks, who, in his last book dedicated to the links between social
orders and historical change, writes: «We develop a conceptual framework, not
a formal or analytical theory. […] We do not present a formal model that
generates explicit empirical tests or deterministic predictions about social
change. Instead, we propose a conceptual framework that incorporates
explicitly endogenous patterns of social, economic, political, military, religious,
and educational behaviour» (North-Wallis-Weingast 2009, p.xii). So, in this
paragraph we try to indicate the conceptual coordinates within which a
modelling of the suggested ideas should be placed. The social dynamics of
polytheism can be schematized by using a double interpretative grid. The first
grid suggests four institutional “places”: caves, temples, palaces and bazaars,
as suggested by Martinez Coll’s simple but powerful classification (2006). In
the caves, groups of human beings join together according to proximity ties,
determined by blood and territorial proximity; the institutionally-specific
rationality is led by instinctive and emotional impulses. In the temples, humans
are sharing the same god or the same ideology to join together; they obey to a
rationality rooted in the tradition. In the palaces political groups meet,
supporting a rationality consisting in the respect of a set of informal rules or a
system of formal rules. And finally, in the bazaars those who have something
to sell to others who are willing to buy meet; they follow a rationality oriented
towards the calculation of the cost-benefit proportions. Each subject can
inhabit one, two, three, or even all the institutional forms. As Pantaleoni noted
down, the subject’s strategic choices are coherent when referred to a form of
rationality, but often are inconsistent if judged according to a different form of
rationality.
The second interpretative grid indicates that each player can chose among four
fundamental strategies: cooperate (C), not cooperate (N), abstain from the
social game (A) and destroy (D). To intuitively justify the relevance of these
strategies, let’s imagine using a bus as an example of common good. If we pay
the ticket, contributing to the financing and/or production of such social
resource, we are cooperating (C). If we travel for free, defecting the collective
action and leaving our engagement to others, we are not cooperating (N), and
we are putting in place a strategy of redistribution/expropriation which is
favorable to us. If we don’t take the bus and we prefer to go by foot, since
using the bus is optional, we are abstaining from the social game (A); such
strategy is also called the loner’s strategy: someone who neither cooperates,
nor defects, and instead avoids to participate to the game of society (Hauert et
al., 2002). And finally if we damage the bus, in addition to not paying the
ticket, we are practicing a destruction strategy (D) (Lee, 1988). Each player
can choose one out of the four different strategies for each situation.
The double interpretative grid brings out complex outcomes (I,j,k,l): an actor
of the type i plays a pure j strategy when he meets an l actor playing a pure k
strategy. We can imagine that all the encounters are taking place in a square,
meaning the “place” of the society in which the rationalities of the other
institutional places face each other/collide. We obtain, in figure 3, a matrix of
16 x 16 = 256 possibilities, since the strategies are four [C = cooperation; N =
non cooperation; A = abstention; D = destruction] and four are the
institutional “places” [G = cave; T = temple; P = palace; B = bazaar]. The
resulting combinations are AG (T, P, B) = abstaining according to cave
(temple, palace, bazaar); NG (T, P, B) = non cooperation according to the cave
(temple, palace, bazaar); DG (T, P, B) = destroy according to the cave
(temple, palace, bazaar).
CG CT CP CB AG AT AP AB NG NT NP NB DG DT DP DB
CG
CT
CP
CB
AG
AT
AP
AB
NG
NT
NP
NB
DG
DT
DP
DB
FIGURE 3
Obviously a matrix of 256 boxes has no significance until we confer a ranking
to the possible strategic choices’ payoff. A consistent ranking takes inspiration
from one of the four specific rationalities; we refer here to the bazaar’s one (or
“economistic”), in which each player limits himself to assigning importance to
his own payoff. In the encounter between two actors, it is the following: (N,C)
> (C,C) > (A,C) > (A,A) > (N,N) > (C,A) > (C,N) > (D,C) > (C,D) > (A,D) =
(D,A) = (N,D) = (D,N) = (N,A) = (A,N) = (D,D). The player choosing the first
term of each interaction, obtains the highest payoff when defecting (N) while
the other cooperates (C). However, the actor feels better if he cooperates (C)
while the other cooperates as well (C), compared to if he abstains (A) while the
other creates the common goods (C) he isn’t using. The box (A,A) in which
both avoid to participate to the game is better than the box (N,N), in which
both player play to defect.
The (C,A) box, in which the actor commits to the common good while the other
doesn’t, is better than (C,N), where the actor commits while the other
defections. Proceeding down in the chart, the strategy D makes the scene:
(D,C) is better than (C,D) because in the first case one actor enjoys to destroy
the common good created by the other, while in the second case it is the other
way round. At the end of the list, we find the cases in which no one fuels the
public good and for this reason the “society’s cement” fails: an abstaining (or
defecting) actor while the other destroys, or vice versa, or two destroying
actors, are all strategic combinations incapable of reproducing the community.
The framework outlined above, is methodological. It doesn’t claim, following
some sort of scheme built upon stages - today discredited - that the cave is
pre-modern compared to the temple, which is at the same time anachronistic
compared to the palace, and that the bazaar’s society is “really rational”. On
the contrary, it claims that its critical function lays in the practice of
polytheism’s social action criteria.
It in fact it makes explicit that the above mentioned payoff system is plausible
only when referred to the self-interested rationality of the bazaar. If we
considered, for example, the instinctive rationality of the cave, it would be
reasonable –as the anthropological literature in potlatch documents- to
suppose that the choice of destroying gratifies as much as the choice of
defecting, so that the (D,C) case would be on top of the system. If we
considered instead a situation in which a wider community is not formed yet,
the A strategy (not entering in the social dynamics) would have such an
importance that the combination including it would be overriding; and so on.
Therefore, the framework shows in a complex grid, where we can observe
different outcomes, what would happen in a society if the actors practiced just
the bazaar’s rationality in each type of encounter.
The fact that the game’s matrix is never entirely used in its wholeness is
another methodological merit of such framework. Instead, it needs to be
justifiably sectioned each time in small sub-matrixes, which are able to focus
on the specific nature of specific encounters. For example, in the sub-matrix 3
x 2 of the figure 4, we imagine a situation in which the actor I moving from the
cave rationality –through the C, A, or D strategies- faces an actor II, who
instead applies the C strategy, applying it to the temple or palace rationality.
The ranking payoff’s hypotheses, since the nature of the intersections need to
be taken in account, are different from the “economistic ranking” mentioned
above.
CT CP
CG
AG
DG
FIGURA 4
Last but not least, the matrix is a methodological instrument that makes it
possible to abandon the rigid hypothesis according to which a player not only
“wears” just one dress for each institutional “place” (and the corresponding
rationality form), but also adopts just one strategy of selection.
As Pantaleoni, Weber and Bonhannan suggested, a hybridization between
“places” and strategies can occur. Let’s then just restrict our analysis to two
significant examples. One case of hybridization between institutions occurs
within the bazaar, when uncertain and complex transactions, requiring a high
inter-subjective trust, are carried out. The bazaar’s logic, where subjects
confront themselves with others only according to what needs to be sold or
purchased, mixes with the temple logic, where instead the subjects share a
socialization modality: this strengthens the market anonymous relationships,
favoring the traders’ loyalty (Greif, 2006). A case of hybridization between
strategies is the co-opetition (Brandeburger e Nalebuff, 1998): subjects
interact within forms expressing both competition (D and N strategy) and
cooperation (C strategy). Let’s consider two companies that cooperate on risky
and expensive joint ventures, while competing on the commercial results of
such cooperation. And let’s consider a farming company and a group of
consumers who start together a cultivation of biological apples, so, on the one
side the company commits to commercial horizon and other side the
consumers assure the demand. Nevertheless they are competing when on the
market since the company tries to higher its profit margins, while the
consumers claim lower prices. In the sub-matrix 2 x 2 of figure 5 we imagine a
situation in which the actor I moves from the bazaar/temple’s rationality
through C/N and C/D strategies, to face actor II, who instead moves from C
strategy applying it to the temple or palace rationality. It is an example which
helps to understand the frameworks’ potential.
While in fact figure 4 enables to examine the combinations of multiple
institutional rationalities with various strategies, figure 5 enables to investigate
their hybridization. The comparison between the two types of matrixes’
payoffs, combinatory and hybrid, is an instrument to interpret the subject’s
choices in a polytheistic condition.
CT CP
C/N-B/T
C/D-B/T
FIGURA 5
5. Confronting with Thaler and Zelizer: towards a new research
perspective
When a subject making a choice evaluates non-comparable alternatives, it is
immersed in a “polytheistic condition”. We already discussed about the
subject’s capacities to choose when he is immersed in such a condition. What
at this point is left to discuss, is a crucial theoretical issue: how many prayers
are worth the hundred euros that could purchase five packages of detergent, if
prayers and detergents aren’t comparable alternatives? What happens to the
currency, when it measures both prayers and detergents, but not the one with
relation to the other?
Let’s start by recalling the answer, substantially similar, suggested by the
economist Richard Thaler and by the sociologist Viviana Zelizer. We’ll then
sketch
out
an
answer,
partly
different,
based
on
the
above
stated
argumentations.
Each mainstream discussion regarding monetary economy defines money
according to its functions, establishing mainly two functions. In the first case,
money is everything that is generally accepted in return for goods and as an
instrument to extinguish debts. Everything can become money, as long as it is
universally accepted as a payment; more specifically, money can be a mark
without any intrinsic value, meaning pure credit. Each form of money is
fiduciary, in the sense that the creditor establishes when to accept it, apart
from the money issued by the State that has by law the “releasing power”: it is
called currency and it is the only one that can’t be refused by those who have
to receive a payment.
In the second case, money is the measure of value, or the unit of account, or
the numerary.
If, for example, I bought a pair of shoes in absence of a shared unity of
measurement, I should ask which, and how many, goods are necessary to
each merchant for remising those shoes.
If a merchant wants apples but I have watches I should know the trade ratio
between watches and apples, and accordingly between apples and shoes; and
likewise, if another merchant wants clothes, or wine, or books. Hence, I should
know all the possible trade ratios between existing goods: if the goods are n,
those ratio are n(n-1)/2. Instead, thanks to the unit of account, the trade
ratios reduce to n-1, since it is sufficient to relate each good to what has been
selected as currency. But «it isn’t necessary to use as a measure of value each
good that is used as trade intermediary;[it is just necessary] but only to state
it in terms of something that is a measure of value » (Robertson, 1928,
p.242). The intermediary can be a food voucher issued by a supermarket
chain, while the unit of account is the euro; other examples are certificates,
coupons, expense accounts or local currencies. According to this thesis, which
falls under the standard discussions of monetary economy, it is essential that
the unit of account is universal, or that trade ratios are elaborated among all
the goods according to the same currency. It instead appears of secondary
importance that markets are fragmented on the payment means, generating
special currencies with a limited, special and temporal, acceptability. One of
the most important XX century’s economists even theorized that in a free
society manifold currencies could and should proliferate as mediums of
exchange (Hayek, 1976).
In that regard, heterodox economists such as Thaler and sociologists such as
Zelizer innovate theoretically. They suggest that the contrary can happen: the
intermediary, or the means of payment, is constituted by euro, a legal
currency, while the measure of value or unit of account is special currency. The
latter upraises and is acknowledged only in a limited “commercial circuit”
(Zelizer 2006), establishing trade ratios not among all the goods of the
economic system and the currency, but between those circulating in that
specific circuit and the currency. Welfare and social assistance services, charity
and gifts (Zelizer, 1994); life and children’s life evaluation (Zelizer, 1979 e
1985); access to sexual performances (Zelizer, 2005); migrants’ remittances
(Zelizer, 2009); religious practices (Iannaccone, 1988); political activities
(Pizzorno, 1986); symbolic goods, such as Royal jewels or others trophies, and
intangible goods such as love and honor (Gregory, 1982; Weiner, 1992); non
reproducible artistic and environmental assets, such as a Leonardo painting or
a valley of the Dolomites (Fourcade, 2011); new knowledge fluxes (Boulding,
1966); the relational goods (Belk, 2010); the relational assets (Uhlaner,
1989); the informal economy goods (Hart, 1973); the status assets (Thaler,
1985); are all examples of limited circuits2. When a subject enters in one of
these commercial circuits, the currency he makes available measures only the
goods belonging to that specific circuit, and not all the others. Many families,
for example, create separate accounts for the children education, holidays,
medical treatments, retirement, rent, bills, transportation, cultural expenses,
and so on (Thaler, 1999). Gross and Souleles (2002) documented that the
2
Among some special currencies of commercial circuits there are common requisites. One that is particularly
relevant, since it contradicts the traditional idea according to which money can be subdivided to one’s taste, is that
money shows some forms of indivisibility in certain circuits, such as the religious goods’ one, the artistic-environmental
one, the sharing one, and many others.
American families of their sample have more than 5.000 dollars in cash and a
negative balance on the credit card of about 3.000 dollars. Since the passive
interest rate is on the paper substantively higher than the one on the savings
accounts, it would be convenient to extinguish the debt, but the majority of the
families don’t extinguish it, because they believe they are dealing with different
piles of money.
Moreover, also in a commercial circuit of consumption goods, the subjects uses
money in different ways, according to its provenience, or rather according to
the circuit in which it was obtained.
«We have a friend called Dennis, when he turned 65 he started receiving his
retirement, despite of the fact that he and his wife are still working full-time.
[…] Dennis, now that he’s still healthy, wants to be sure to satisfy all his whims
(in particular some trips to Paris including abundant gastronomic experiences)
without being discouraged by costs. So he opened a special saving account,
called “fun account”, in which he deposits regularly his pension. With the
money deposited on this account, he could buy a new expensive bicycle or a
case of good wine, but surely not fix the home roof» (Thaler e Sunstein, 2008,
p.60). Therefore, the exchange rate between the safety of a child and money,
or between a trip to Paris and money, it’s not calculated together with the
exchange ratio between a box of detergent and money (according to the
consumption), or between an hour of extra-work and money (according to the
profit); even if the means of payment is always the euro. According to the
mainstream economic theory, it doesn’t matter from where the money comes
from, nor the way it is used: what is important is that the consumers’ utility, or
the worker/producer’s payoff, is the highest. According to Thaler and Zalizer,
instead, money has never a perfect fungibility: a euro never equals a euro
when the consumption goods’ category changes, or the category of activities
through which it was obtained.
A different approach is the one recently systematized by Lucien Karpik (2010).
He focused on the uncertain and incommensurable “singularities”, meaning the
goods with multidimensional economic characteristics. For example, the home
brew beers respond to multiple purposes (multidimensionality), their taste is
surprising (uncertainty) and they are difficult to compare since they belong to
different cultivation areas (incommensurability). Karpik asserts that the
subject doesn’t formulate evaluations based on calculus to choose among
peculiar goods, but rather on merely qualitative opinions. Such opinions
summarize a plurality of criteria in a consistent , in which a good is preferred
to another one, since they are based on personal and impersonal devices
(Foucault): in the first case they give importance to advices made by friends,
or others within the same social network; in the second case, they include
quality clues, experts’ opinions and any kind of grading. Karpik’s thesis can be
interpreted as a refined version of the “rational ignorance” idea (Downs,
1957). Up against peculiar goods, the subject feels incapable to elaborate
informed decisions. The goods characteristics appear to him as so complex and
blurry, that the effort to obtain directly better information would be much more
expensive and probably inadequate. So, for the subject is rational to remain
ignorant, delegating to others, or to institutional mechanisms, the judgment
formulation. His thesis appears, paradoxically, to fall under the classic
paradigm of rational choice from which it aims to detach itself. But the hardest
difficulty is traceable comparing Karpik to Thaler and Zelizer. Karpik focuses on
a limited number of case studies on goods, as they are the only peculiar goods
on the market. On the contrary, Thaler and Zelizer document that a wide part
of ordinary goods is mistaken with peculiar ones. The devices orienting
judgments exist even when, going to the supermarket, we check the labels or
the consumers association’s indications, or when, investing in the stock
exchange, keep in account the rating agencies’ grading or the financial
advisors’ and mutual fund managers’ opinions. Peculiarities are much more
central in the market’s functioning than Karpik does actually recognize.
Thaler’s
and
Zelizer’s
structuring
appears
theoretically
and
empirically
stronger. Peculiar goods develop in commercial circuits that subjects built and
actively share, and not under the foucaultian devices’ regulation which mould
the subjectivity.
And yet, despite of the fact that Thaler’s and Zelizer’s approach is illuminating
for many aspects, it doesn’t explain, in our opinion, why so many different
currencies spring. Thaler evocates a mental accounting based on barriers and
cognitive distortions, while Zelizer evocates the society articulation in culturally
and ethically variegated fields3. They are both weak explanations, because it is
possible to intervene on cognitive difficulties by mitigating them or orienting
them, while it is not to be excluded, in principle, that the marketing of the
world goes so far that special-purpose currencies are eliminated in favor of an
all-purpose money. Their explanations have a contingent validity, which
depends on circumstances that can change. In particular, such circumstances
can fail thanks to processes, not connected to the destiny’s caprices or to
imponderable historical swings, that appear central to the authors: Thaler
dedicated the
recent years to
studying policy interventions aimed to
“straighten up” the subjective categorizations of goods, which are only little
rational (Thaler e Sunstein, 2003); while Zelizer has always acknowledged the
theoretical position expressed by Marx and Simmel, according to which money
(and the connected economic ideology) becomes the universal leveling of
social and cultural differences (Zelizer, 1988, pp.620-22). In this paper we
outlined a third theoretical perspective, funded on the incompleteness of the
preference relation. It explains that the euro spent for prayers or detergents
are only little fungible, since the economic subject doesn’t know or doesn’t’
want to judge how much detergent equals a prayer, and vice versa; and he
doesn’t know or doesn’t want because his qualitative judgment on detergents
and prayers, as already seen in § 2, can’t be translated in quantity terms. Our
explanation is complementary to those already outlined and doesn’t invalidate
their validity. It though, appears more solid since it argues that polytheism is a
non removable anthropological condition of the subject’s choice. Furthermore,
without the non-comparability basis of alternatives, the social activities that
transform objects or signs into trading means, and the activities that divide
money into distinct categories, are placed on the same level (Zelizer, 2007,
p.1062). Instead, while the first activities multiply money as a means of
3
We are here recalling the remarkable differences between the Thaler’s and Zelizer’s elaborations, on which
Zelizer writes (1989, p.350, squared bracket added): «[Thaler’s] mental accounting cannot be fully understood without
a model of “sociological accounting”. Modern money is marked by more than individual whim or the different material
form of currencies».
payment, the second ones multiply money as a unit of account; moreover,
while the first ones are easily recognized by the mainstream economists, the
second ones brake with the traditional way of conceiving money.
Last but not least, our approach is able to explain a crucial point, on which
Thaler and Zelizer have nothing to say: what happens to money when it
measures both prayers and detergents, but not one in relation to the other? In
wider terms, referring to Pantaleoni, Weber and Bohannan’s arguments, what
happens when the subject evaluates as non-comparable goods prayers and
detergents, and for this reason he tries to take advantage from transferring
the goods (or the peculiar money connected to them) from a commercial
circuit to another? The formal model, indicated in §3, clarifies that the subject
creates an unconcerned relation between goods (or peculiar money) belonging
to the two different circuits, based on their position in regards to other goods
(or money) and not on their equal utility. Given such relation, the subject
explores where a good (or peculiar money) arrive from, or where a good (or
peculiar money) leads to; and finally he chooses, even if in absence of
comparative judgments able to evaluate the most useful alternative, either
because he follows the circuit open to change, or, on the contrary, because he
follows the one conserving the status quo.
When there is a partial comparability, as demonstrated in §3, the subject
follows a protocol, already illustrated by Wittgenstein, that allows him to
choose, by exploring the non-transitive similarities between alternatives,
according to reason. Thanks to the conceptual framework illustrated in § 4 we
outlined the ways in which it is possible to represent the combinations of the
multiple institutional rationalities and the various strategies as much as their
hybridizations; and the ways in which it is possible to compare a combinatory
matrix payoffs with those of a hybrid matrix, that can explain, on the one side,
when a subject moves his goods (or peculiar money) from a circuit to another,
and on the other side, when this doesn’t happen. Obviously, we just outlined a
research perspective: we will tell how fruitful it is from future research
developments.
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